The stages of auditing are as follows: determine audit approach, understand the entity, assess risk of material misstatement, select audit procedures, prepare report, and report to management. Auditors determine risks, formulate responses like additional procedures, and test controls and substantive procedures. Audit risk is the risk of giving an inappropriate opinion and comes from inherent, control, and detection risk. Business risk impacts the organization directly from operations.
23. If there are internal auditors, external auditors should ask them if they aware of actual, suspected, or alleged fraud, obtain their view about risk of fraud, and procedures performed
24. Make enquiries to other operating personnel not involving in governance.
25. Obtain an understanding of how those governance oversights the processes of identifying and responding to fraud & internal control in place.
26. Make inquiries to governance if they aware of the actual, suspected, or alleged fraud.
63. Professional Competence and due care: maintain professional knowledge on current development in practice, legislation, and techniques, act diligently or thoroughly and in accordance with standard.
124. Limitation of accounting system and internal control (accounting record may not full of detail and accounting system may be operated by person who do not full understand of system)
159. Auditing through computer: examine the detail processing routine of control in the system if adequate, and this should use Computer Assisted Audit Technique (CAAT)
166. Controls are less effective than they actually are or test of details that a material error exists when it does not – this is risk of Audit efficiency.